Should I buy a financial advisor’s book of business or the whole practice?

Two buyers can read the same advertisement and be offered very different things. One deal moves a list of client relationships to your practice. The other moves a business with people, contracts and history. Neither is better in the abstract. The useful question is which one you can absorb well, and which one the clients are likely to accept.

What a book purchase brings

In a book purchase, the clients move into your own practice, under your name and your systems. That can be simpler to run. It also puts the weight on you: you carry the integration work, the client meetings and the follow-up. Ask how clients will learn of the change, and how many you can serve well without letting existing clients wait.

What a whole practice brings

A whole practice brings staff, an office lease, software, a brand and the contracts that go with them. Existing staff can keep service steady, and can help clients feel at ease. They can also be a cost you did not plan for. Read the employment arrangements, the lease and the vendor agreements with your lawyer.

Continuity for the clients

Clients care about who answers the phone and whether their plan carries on without a gap. A whole practice can keep familiar faces. A book moves clients to a new team. Either way, ask what the seller will do during the handover, and how long. Rules on moving client accounts are for your firm and your lawyer to explain.

What to check before you choose

• How the revenue is earned, and how much of it depends on the seller personally.
• Which clients are likely to stay, and which relationships are close to the seller.
• Which contracts, leases and systems would come with a whole practice.
• Whether your own capacity fits the book you are being offered.